Saturday, November 23, 2013

Interview with Voice of America Albanian Service about "Operation Valuable Fiend"

At Voice of America studios on November 23, 2013.
I visited Voice of America this morning, where I was interviewed about my soon-to-be-published Operation Valuable Fiend, by Rudina Dervishi of the Albanian Service broadcast "Ditari."

The entire experience was outstanding. The editor, Ms. Isabela Cocoli, was instrumental in reaching out, coordinating schedules and lining up content for the interview. Ms. Dervishi was an excellent interviewer who put me at ease in front of the camera, asked thoughtful questions focusing on the heart of the matter and moved the conversation along without making me feel rushed. Mr. Ilir Ikonomi pieced together a nice promotional movie clip in advance of the broadcast. Two whiz kids behind the scenes, Julian Zyla and Festim Gashi, made sure everything went smoothly. I am sure there were others involved that I did not get a chance to meet.

With Ms. Rudina Dervishi, VOA Albanian Service
anchor of "Ditari."
I was particularly impressed that within minutes of the interview, content flowed from live TV to video clips on YouTube, updates on the Website and posts on Facebook and Twitter. A truly modern media operation for which you and the Voice of America should be proud. Now, as in the past, VOA Albanian Service remains the gold standard that other Albanian media operations try to emulate.

Here's a link to the video (in Albanian). The transcript of the interview follows.


 
Ms. Dervishi/VOA: A new book by Albert Lulushi, titled "Operation Valuable Fiend" is expected to be published in 2014 in the United States and Albania. The book recounts the efforts of the Central Intelligence Agency, CIA, to overthrow the communist regime in Albania in the early 1950s. It is known that these efforts failed, but why? The communist regime in Albania trumpeted this failure as its own victory, whereas Nicholas Bethel made the case in 1984 that the American operation was betrayed by the superspy Kim Philby. Without rejecting these claims, Lulushi has taken a deep dive into the details of the operations and describes all the elements that contributed to their failure, based on a trove of recently declassified CIA documents about the operation with the code name BGFIEND.

How did you get the idea to write this book?

Like many Albanians of my generation, I learned in the communist schools the version of the story pushed by the government propaganda. When I came to the United States, I read Bethel's book and for a long time I found his arguments satisfactory. Then, about a year ago, I was searching in the National Archives and I noticed that the CIA had declassified a large amount of operational documents about the activities they conducted between 1949 and 1954. Reading these documents, I realized that the full story of these activities had not been told and it had not been presented in its entirety to the American or Albanian public.

What was then the operational plan of the CIA?

At the beginning of 1949, a very good opportunity existed for the CIA to topple one of the regimes under the dominance of the Soviet Union. This was Albania. At the time, as you know, Tito had broken away from the communist bloc. Albanian continued to remain under the Soviet influence, but it was physically isolated and unable to receive reinforcements from Soviet troop should an upraising against the communist government occur. At the same time, the CIA had expanded its mission. Until that time, its role had been to collect, analyze and disseminate intelligence on foreign countries to the decision makers in the executive and legislative branches of the U.S. government. The role of the CIA was expanded in 1948-1949 to allow the Agency to conduct paramilitary operations. A new organization was stood up within the Agency to execute these operations, headed by Frank Wisner. They saw in Albania the opportunity to prepare their first paramilitary operation, which they began to plan and execute in 1949.

How well was the plan prepared?

Theoretically, considering all the aspects that were taking into account, I can say that the operation was prepared in thorough details, from high-level actions, such as organizing the opposition outside Albania among anti-communist émigrés in Italy and Greece, and down to details, such as planning to offer $500,000 each to Mehmet Shehu and Enver Hoxha for their defection in place and promise not to use the Albanian army to oppose the operation. However, a number of these planned actions remained at the planning level and were not implemented.

This topic remains fascinating even after all these years. British authors have advanced the hypothesis that Kim Philby, the Soviet mole inside the British Secret Intelligence Services, informed the Soviet about these plans, which is how the communists in Tirana knew about them and were able to fold them. Does your research support of weaken this hypothesis?

In my opinion, Philby's betrayal was not the main reason for the failure of the operations. I say this for several reasons. First, although this was a joint operation between CIA and SIS, by virtue of how operations of this kind were conducted, there was a separation between the two services and operational details were not shared. So, even though Philby had knowledge of the high-level strategy and objectives of the plan, from the operational perspective, he did not know the locations or times where the American agents were dropped. Next, the majority of the agents captured or killed in Albania were sent by the Americans; the British agents in general were able to exfiltrate without falling into Sigurimi's hands. It is natural to think that if Philby sabotaged these operations, he would sabotage the British as well as American operations. Lastly, the deepest losses for the Americans occurred after Philby was recalled from Washington to London, where he was forced to resign from SIS under suspicion of being a Soviet spy. This happened in spring/summer of 1951, whereas the most spectacular losses of the Americans came between 1952 and 1954.

After these operations ended, were there other efforts to overthrow the communist regime in Albania.

I don't believe there have been active efforts. I say this because one of the important lessons learned from this operation by the political establishment in Washington and the CIA was that it was very hard to overthrow an already-established regime in Eastern Europe. CIA shifted its attention to the Middle East, where they organized the 1953 coup in Teheran, and then to Latin America, where they conducted the 1954 coup in Guatemala. From the perspective of that time, these two operations were successful in that they accomplished their most immediate objectives. The conclusion, then, was that it was better to direct the efforts, experienced agents, and lessons learned from the Albanian experience to the Middle East and Latin America. These same agents and experience were also used to plan the 1961 invasion of Bay of Pigs in Cuba, which, as we know, was a disaster.

Beyond its historical value, what other benefits do you think your book will bring to the Albanian society and politics?

This is a very good question. These events, indeed, occurred over sixty years ago. My book recounts the history as it happened, based on facts and documents, and without subjective interpretations, which will be valuable for the Albanian society. Looking at the events from a broader perspective, one of the main reasons why the operation failed, was that the Albanian anti-communist forces were unable to create a united front of opposition against the communists. They were not able to speak with one voice to their American sponsors. If you look at the more recent history of the war in Kosovo, the Albanian politicians were able to create a united front when communicating with the American and the Europeans. This enabled them to ultimately achieve their objectives. Thus, the lesson for the Albanian political class is that when it comes to representing the national interests in front of the international community, they need to leave behind the differences and narrow political interests that dominate the internal politics.

Thank you very much for coming in our studio today.

It was a pleasure and I thank you for your thoughtful questions.

Sunday, November 17, 2013

Interview with Xhevdet Shehu of leading Albania daily DITA about the upcoming publication of Operation Valuable Fiend

Front Page of DITA, November 14, 2013.
Recently, I set down with Mr. Xhevdet Shehu, one of the most distinguished and professional Albanian journalists, for an exclusive interview given to his newspaper, DITA.

DITA is an independent daily which began its publication just recently with the inaugural edition coming out on November 1, 2012. Despite its young age, DITA has established itself as an important independent voice among the Albanian media, playing an important role in reporting accurately about the parliamentary elections of June 2013 -- the first elections in post-Communist Albania where the power transitioned peacefully between the opposing political parties. Leveraging a Western-style approach to its concept of operations, with attention-grabbing front page designs which often lampoon politicians and oddities of the Albanian society and democracy, DITA has become the best-selling newspaper in Albania.

Mr. Shehu is a veteran journalist that has contributed to multiple Albanian publications over the years. In the early 1990s, he became the first correspondent of the Voice of America in Albania chronicling the dramatic transition to democracy of that country. He recounted the experience of those years in his book "The VOA Ambassador." Today, Mr. Shehu covers politics for DITA.

Here's a link to the article (in Albanian) that resulted from this interview. A transcript of the interview follows.

Question: Mr. Lulushi, you have written a book about the CIA operations against the Albanian communist regime in 1949-1955 that will be published soon in English and Albanian. This book has already created a lot of buzz among Albanians. How did you get the idea to write this book?

Answer: Having lived in Albania during the Communist rule, I became inevitably aware of the version of history written by the Party propaganda regarding the National Committee for Free Albania, the pursuit of the so-called "diversionists" at the time, and the much-heralded radio deception operation orchestrated by Sigurimi (the Albanian Secret Service) against their opposing foreign intelligence services. After I left Albania to settle in the United States, it became clear for me that I had to reconsider with a critical eye, and often relearn, everything we had been taught in history, literature, art, culture, and so on. In this context, I read what was published in the West about the events of that time in books about the history of the CIA or the British SIS, often being left with more questions than answers. Most of these publications placed the blame for the failure of the U.S. and British operations in Albanian on Kim Philby, the most famous Soviet intelligence officer to infiltrate the ranks of the British services. The actual version of events, however, was more complicated. This became very clear  a few years a go, when the CIA declassified a large trove of documents related to the Albanian operations. I saw an opportunity to provide an objective and fact-based rendition of the events of that time, with importance not only to Albania but also to the CIA and the United States.

Q: A lot has been said about these operations in recent years, especially after the fall of the Communist regime. Sources have been primarily British and most of them come from fragmentary recollections of the protagonists of the events. How does your book differ from what has been said to-date on the subject?

My book presents facts extracted from hundreds of documents, including American, British, Soviet, Albanian, Yugoslav, Italian and Greek sources. The different, and sometimes contradictory, points of view allow readers to reach their own conclusions about the events and the characters of that time. This variety of sources also paints a complete landscape of the events, as is the case with the the mission of the officers of King Zog's Guard in Albania. By using Albanian and U.S. sources, often side by side, this mission is described from its inception, during the visit of King Zog to the United States in 1951, and all the way to its tragic conclusion with the trial and execution of its participants by the Communist government.

Q: Allow me to ask a direct question. Was the United States government really intent on overthrowing Enver Hoxha and his regime or is this all a hypothesis, given that the spheres of influence between East and West were agreed upon at the Yalta Conference?

A: The CIA received approval and began executing the Albanian operation, code name BGFIEND, on June 22, 1949. The final objective of this operation was the overthrow of the Hoxha government. It was the first para-military operation in the history of CIA, which until that time had been limited in its activities in the collection and analysis of intelligence for the U.S. Government. For almost a year, this remained the most important para-military operation conducted by the Agency. Towards the middle of 1950, for a series of reasons explained in my book, CIA abandoned the final objective of the operation -- that is, the overthrow of the Communist regime, although it continued psychological, economic and propaganda warfare, as well as the collection of intelligence against Albania.

The overthrow of the Communist government came again in the front burner at the beginning of 1953, when CIA drafted the plan for a coup d'état in Albania, scheduled to be launched on July 1, 1954. I provide the details of this coup in my book. The plan was not approved because the Agency at the time was tied with similar operations in Iran and Guatemala, which at the time proved more successful that the Albanian operation. Geo-political changes brought upon by the death of Stalin and ascendance to power of Khrushchev, combined with the loss of agents captured or killed by Sigurimi, lead to the abandonment of actions against Albania in 1954 and in the complete elimination of the program by CIA at the end of 1959.

Q: During World War II, there was an American Military Mission at the Headquarters of the Albanian Communist Partisans, which supported them in their fight against the Axis powers. What caused the change in the attitude of the United States towards its World War II allies?

A: In reality, it was the Albanian government, encouraged and instigated by the Yugoslavs, who sabotaged the relations with the USA immediately after the war. After the American mission to Albania was withdrawn in November 1946, I don't think there was an active interest against Albania on the part of the U.S. Government. In fact, efforts by King Zog to draw support for his cause were not encouraged by the Department of State. The situation changed in 1949. The expulsion of Yugoslavia from Cominform left Albania physically isolated from the Soviet bloc. There was a real possibility that the Hoxha government could be toppled by an immediate and decisive action. The U.S. political and military circles at the time had formulated the hypothesis that it was possible to overthrow a Communist government already established by means of covert para-military action without resorting to open war. The Albanian operation was the first effort to test that hypothesis.

Q: Why did the American operation fail, according to what you have been able to gather from your sources?

A: There are many reasons for the failure, but I would highlight the following:
  1. The rivalry among the secret services of United States, Great Britain, Italy, Greece, and Yugoslavia effectively sabotaged the efforts of each side against the Hoxha government, which was able to survive because the status quo was the only solution acceptable by all parties.
  2. Divisions among the different anti-communist factions in exile which, as during the war, were never able to join their forces in a united front against their common enemy.
  3. The ability of Sigurimi to penetrate the ranks of the opposition, including perhaps placing their sources in the National Committee for Free Albania.
  4. Lack of skills, attention to details and respect for operational security on the part of the CIA officers that conducted the operations from Athens.
Q: It is often said that Kim Philby betrayed the operation and was the principal cause of its failure. Is this true?

A: This is a myth advanced initially by Nicholas Bethel in his book The Great Betrayal published in 1984. Based on documents available in archives, I have tried to show that the role of Philby in betraying the operations has been exaggerated. For as long as he was in the United States as the liaison between the British and American intelligence communities, Philby had knowledge of the political and strategic aspects of the operation, but not of the tactical plans that had to do with operational details, including locations or dates when the American-sponsored agents were dropped. The greatest losses of the operation came after Philby's recall from Washington, under suspicion for being a Soviet spy. This, in my opinion, is proof that the sources of information for Sigurimi were Communist agents or sympathizers who had penetrated the ranks of the Albanian exiles at the time.

Q: Was the outcome of this operation analyzed by the cognizant elements of the U.S. Government? What were their conclusions regarding Albania?

A: The most important conclusion that CIA and the Sate Department drew from the Albanian experience was that it was impossible to overthrow a Communist government already under the Soviet umbrella using only covert paramilitary means. Encouraged by successful efforts in Iran and Guatemala, the attention of the CIA moved from Europe to Latin America, Southeast Asia, and Africa. Interest on Albania faded away significantly after Albania broke away from the Soviet dominance in 1961 -- an event which eliminated the strategic importance Albania had as a Soviet post in the Mediterranean and effectively accomplished one of the objectives of Plan BGFIEND. Albania began to receive interest again in the beginning of 1980s, on the eve of the transfer of power that would come with the death of Hoxha. The aim was to accomplish the other objective of Plan BGFIEND -- the establishment in Albania or a government friendly to the United States, an objective which was conclusively accomplished with the admission of Albania in NATO.

Q: Are there documents about the continued interest of the United States in Albanian affairs?

A: CIA produced analysis of the situation in Albania, knows as Intelligence Estimates, regularly throughout the 60s, 70s, and 80s. They are available today at the National Archives. However, operational details like those for Plan BGFIEND, if they exist, remain classified.

Q: How do you explain the fact that the Voice of America has broadcasted without interruption in Albanian since its first broadcast in 1943, unlike other services like BBC?

A: It can be construed as an example of the continued attention of the United States towards Albanian interests, since 1919. The British policy, on the other hand, has always been ambivalent towards Albania. Correspondence between the State Department and the British Foreign Office discussed in my book shows that as last at 1953 the British government was open to a solution in which Greece would annex the Vorio Epirus of Albania, and the remainder of the country would join the Yugoslav Federation as its seventh republic.

Q: Can we then see this position of the United States as a strong support for its territorial integrity even during the Communist period?

A: Yes, without a doubt, as the previous example shows. Another example is the American opposition against the Greek territorial claims against Albania immediately after World War II. Citing from a message sent to Athens by the American government at the time, these claims were considered as having “no ethnic, little strategic and less historical basis.” When the Greek Army pushed the Greek Communist guerrillas to the Albanian border in 1949, they were determined to continue the advance into Albania, thus making the annexing of the southern regions of Albania a fait accompli. It was the forceful intervention of the State Department, CIA and the Pentagon, that convinced the Greek government and military not to undertake such an adventure.

Q: Let's conclude at this time the interview with the understanding that we will continue the conversation when the book is out. Do you agree?

A: Yes, absolutely. It will be my pleasure to continue our conversation and to the exchange with one of the most professional and prestigious newspapers in Albania at the moment. Thank you!

Monday, July 8, 2013

An Update on My Earlier Crowdfunding Post

A couple of months ago, I posted a summary of "crowdsourcing," with special attention to "crowdfunding" and its flagship online sites, Kickstarter and Indigogo. Follow this link to read that post.

The Wall Street Journal published an article on June 21, 2013, by Ellen Gamerman, which can be read as a nice update to my earlier post. Titled "The Trouble with Kickstarter," the article discusses the uncomfortable feelings that pushy crowdfunding campaigns may create for the friends and family of those who are asking for funding.

"The art-world equivalent of paying protection money to the mob." -- this is how one actress interviewed for the article described her contributing to numerous campaigns by colleagues and acquaintances in her profession.

The article also describes how things go wrong with crowdfunding campaigns, including:
  • People raiding their social networks for cash
  • Crowdfunding use by celebrities, and children of celebrities, who need them the least.
  • "Helicopter" parents fundraising on behalf of their children.
  • Reward systems that end up being hard to fulfill.
  • Projects that secure financing, yet do not get completed.
Follow this link to read the entire article online.


 

Tuesday, April 30, 2013

Voice of America's Albanian Services Celebrates its 70th Anniversary

On 13 May 1943, the first Albanian broadcast of the Voice of America went on the air. Only 14 months-old at the time, VOA was already broadcasting hundred of hours of programming in dozens of languages around the world.

In its inaugural program, in German on 1 February 1942, a voice in the ether announced what could well summarize the credo of VOA in the years to come:

"Today, and every day from now on, we will be with you from America to talk about the war. . . . The news may be good or bad for us – We will always tell you the truth."

For a lot of people on the other side of the Iron Curtain, the news kept getting from bad to worse throughout the Cold War. The repression of anti-communist movements was brutal and the list is long: Albania between 1944-1954, East Berlin in 1953, Hungary in 1956, Czechoslovakia in 1968, Poland in 1970s, etc. VOA broadcasts provided a glimmer of hope for those who could listen to its broadcasts at the time, although it must have felt like looking at a star in a cold night -- you know it is there yet it is so far away that it has no practical effect in your life.

People of my generation who had their formative years in the 1980s were fortunate to see the darkness part and ultimately dissipate with the collapse of communism in Eastern Europe between 1989 and 1992. For us in Albania, VOA broadcasts were the only source of news in our own language of the whirlwind of change in those years.

But it was more than just the words coming from the radio sets that affected us. VOA leaders at the time, like Mr. Frank Shkreli, Director of the Euroasia Division, and Dr. Elez Biberaj, Chief of the Albanian Service, put on the air as broadcasters young people who had recently defected to the West.

It was a genial move! At the same time that our conscience processed the words enunciated by the fresh voices of Izabela Islami, Zamira Islami, or Astrit Lulushi, our sub-conscience gradually began to formulate a path out of the darkness. They spoke to us but because they sounded like us, we could be like them.

Such subtle shifts in our psyche are what enabled the first demonstrations of January 1990, the storming of the Western embassies in July 1990, the student demonstrations of December 1990 and the mass protests of 1991 and 1992 that ultimately put an end to the communist regime in Albania. The rest, as they say, is history.

Congratulations to the VOA Albanian Service on this significant milestone!

Wednesday, April 24, 2013

Crowdsourcing and Crowdfunding: What the handling of the aftermath of Boston Marathon's bombing, North Korea, the Statue of Liberty, and Nigerian email scams have in common.



Image from crowdsourcing.org.
The decision by the FBI to invoke assistance from the public in sifting through the volume of images, photos and videos in search of the Boston Marathon bombing suspects was the most recent and visible example of crowdsourcing. More specifically, it was a Macro-tasking type of crowdsourcing, where a large task is presented to the public and each individual has the freedom to work on the solution as they see fit. Other types of crowd sourcing include Micro-tasking, Contests, and Crowdfunding.
In Micro-tasking, a large project is broken down into tiny tasks completed independently by a number of individuals. Amazon's Mechanical Turk or North Korean Mass Games are prime example of this type of crowdsourcing.

In Contests, a crowd is invited to work on a task but only winning or chosen entries receive compensation. On one end of the spectrum are sites for light-weight contests, like designing a logo, picking a tag line or a business name, such as SquadHelp or crowdSPRING. On the other side are heavy-duty sites like InnoCentive where solvers compete on challenges like Improved Asymmetric Synthesis of a 3,4-trans-substituted Piperidine or NASA's challenge for a Simple Microgravity Laundry System.

Image from Forbes.com.
Crowdfunding is one of the forms of crowdsourcing in which the crowd is invited to contribute monetarily towards an individual, goal, project, idea, etc. According to Nesta, the UK's innovation foundation, there were over 450 crowdfunding sites in 2012 with another 250 sites planned to go live in 2013.

At a high level, the business model for these sites is similar. The party seeking the financial contribution makes a pitch on the website describing how much they need, how the funding will be used, and what, if any, incentives they promise to the contributors. The potential backers sift through these pitches and individually or as a team decide to fund them or not. The crowdfunding site itself serves as an intermediary that facilitates the exchange of information and the transfer of funds for successfully funded ventures.

Obviously there are differences, driven by the type of contribution, incentives, motivation of funders, etc. Based on these differences, crowdfunding may be classified in the following four categories:
  • Donation. In this type of crowdfunding, the funders simply donate the money to support an individual or cause, without expecting anything in return. Perhaps the oldest example of crowdfunding belongs to this category. In late 19th century, France donated the Status of Liberty to the United States. Specifically, the donation meant that the French would cover the cost of building the statue and shipping it to New York. The Americans were responsible for preparing the site where it would stand and erecting the status there. A commission headed by Joseph Pulitzer was put together to raise the $300,000 estimated for the project. However by the time the statue was ready in France, they realized the commission had raised only $200,000. Pulitzer, through his network of newspapers, issued an appeal to the American public to donate in order to make up the shortfall. Within five months, $100,000 were raised from small donations, illustrating the tremendous financial power of the crowd if its interests are aligned. A typical crowdfunding site in this category today is gofundme. Within nine days of the Boston Marathon bombing, the site had raised $2,093,716 by 34,026 for its victims with an average donation of $61.50 per donor.
  • Reward. In this type of crowdfunding, the backers are promised a reward or incentive if the idea or project they are supporting comes to fruition. Perhaps the best known example in this category is KickStarter, where as of September 2012 over 65,000 projects had been submitted for funding and almost 44% of them were successful in raising a total of $300 million. KickStarter has an all-or-nothing model, in which projects are funded only if they raise all the money requested by the deadline specified. Other sites like IndieGoGo  transfer the money to the requestor as it is pledged irrespective of whether the target is met or not.
  • Lending. In this type of crowdfunding, the backers lend the money, typically in small chunks, to receivers who pay it back with interest over a predetermined amount of time. The interest rate typically is tied to the borrower's credit history. One of the most popular personal lending sites is Lending Club, which since its inception in May 2007 has handled over 1 million loan requests, approving 12% of them for a total loans amount of over $1.65 billion and almost $142 million in interest paid to investors. (Source: Lending Club, accessed on April 24, 2013.) While potentially these lending sites can be used by entrepreneurs and small business owners, in reality most of the loans (almost 80% of them in the case of Lending Club) go to consumers for debt consolidation and to pay credit cards with higher interest. An interesting twist on the concept is People Capital, which offers loans to college-bound students based not on their credit score, which most of them have not established yet, but based on their future promise. Yet another twist to the model are micro-financing and social landing sites, like the non-profit Kiva, where loans are used to fight poverty and support social causes in emerging markets.
  • Equity. In this type of crowdfunding, entrepreneurs and small business owners are matched with investors to raise money for their business as an alternative to seeking angel investments of venture capital backing. Because the transactions here qualify as equity purchases, they are subject to legislation and regulatory controls, which often is an impediment to the growth of these platforms. This is perhaps the reason why the leading sites in this category are European based, including Symbid, and crowdcube. The passing of the Jumpstart Our Business (JOBS) Act in the United States on April 2012 is intended to encourage funding of U.S. small business by easing various securities regulations, so we should expect Equity crowdsourcing platform targeting U.S. business pretty soon.
  • Scams. Like any other human endeavor, crowdfunding can be used for illegitimate or dishonest purposes as well. I am not talking about abuses of the platforms described above but schemes intended from the ground up to defraud people of their money. Examples are numerous here, including Nigerian emails, Ponzi schemes, fake donation sites that pop up after each tragedy, to name a few.
In conclusion, crowdfunding, as a model of capital distribution, is not new. But the convergence of mobile, cloud and social networking technologies has turned this model into a serious alternative to traditional banking, investment, VC and charity models.

I hope this overview is useful to you in understanding the space. If you have time, follow some of the links I have embedded and get involved. Support a project or idea you find worthy of your backing. if you happen to become inspired and come up with your own project, don't forget to send me the link so I can support and promote you.

Monday, April 8, 2013

Is the Downward Spiral in Enterprise IT Spending Evidence of IT Innovation at Work?

According to +Gartner (Gartner Research, Inc.), the overall enterprise IT market was predicted to slow down remarkably in 2012 with a growth rate of just 0.3 percent. The cumulative annual growth rate (CAGR) for 2011-2016 is estimated to be just 2.6 percent, with sectors like Government and Education actually shrinking.  (See research article by analyst Vittorio D'Orazio, ID: G00239472, 1 November 2012).

Is this a temporary trend, driven primarily by economic uncertainties left over from the 2008 financial crisis? Or is it a permanent effect on enterprise IT inflicted by innovations in the areas of Mobile, Cloud, and Consumer-driven technology?

Other industries have experienced shrinkage due to innovation. A recent example was presented in an article by +Paul Ziobro and Serena Ng (+The Wall Street Journal, Is Innovation Killing Soap Sales?, 4 April 2013, Pg. B1). According to the article, the introduction of pre-measured pod detergents has actually caused an industry-wide drop in sales volumes by 2.1 percent even though the price per load has gone up by at least 25 percent. Apparently, the end-user savings from efficient use of detergent, albeit at a higher price per load, have translated in lower overall volume of sales revenue for the industry.

Questions to Think About:
  • Will pay-as-you-go models associated with X-as-a-Service offerings end up having the same effects on the IT industry?
  • In other words, will efficient use of IT services by end-users actually drive down the growth of IT?
  • Isn't this the conundrum faced by any other utility and should IT planners and strategists factor this global trend in the long-term strategic plans?
Add a comment and take the poll to the right to express your opinion.